Browse Forums Home Finance Re: Do I really need a broker? 48Feb 23, 2009 10:26 am My I was talking to my dad about mortgage brokers, and he was adament that I didn't use one, and that I dealt with the banks directly.
He was under the impression that brokers had a "trailing fee" for the life of the loan (i.e. costs more in the long run). I was under the impression the brokers got an upfront commision from the bank, but that's it - i.e. it won't cost me any more to use a broker than to get a loan through the bank (assuming same kind of loan through the same bank). Can anyone comment on how it works? Re: Do I really need a broker? 49Feb 23, 2009 10:42 am webbiegareth My I was talking to my dad about mortgage brokers, and he was adament that I didn't use one, and that I dealt with the banks directly. He was under the impression that brokers had a "trailing fee" for the life of the loan (i.e. costs more in the long run). I was under the impression the brokers got an upfront commision from the bank, but that's it - i.e. it won't cost me any more to use a broker than to get a loan through the bank (assuming same kind of loan through the same bank). Can anyone comment on how it works? There is a cost to providing the home loan through the bank's branch network (salaries, bonuses, company car, holidays, superannuation, sick leave etc) and the commission network so the lender offers the same interest rate to you regardless of which sales channel you choose. It is not just about providing the loan, the bank also saves a large amount of money when a broker supplies the loan application as there is no lead generation (cost of finding customers) cost for them as the broker's personal consultation results in the sale for them. It's easy to check, I believe you were getting an ING Direct home loan, compare what you were offered by the broker with ING Direct's web site. I can guarantee you that you will find they are identical home loans, rates and establishment costs etc. Re: Do I really need a broker? 50Feb 23, 2009 10:47 am Yep that's exactly right.... they looked the same, so I was wondering about any hidden costs I missed!
Basically - my dad was a bank manager for over thirty years - back in the day when you actually had to go in and meet the manager to actually get a loan. He's been retired for over 10 years now (probably more than that - time really flies), so I didn't think he'd realised how much has changed since "his day". Re: Do I really need a broker? 51Apr 10, 2009 5:31 pm I am using a broker and have been so pleased with the help I have received. I have had lots of questions and it's great I can ring or email at any time. They have taken a heap of the stress out of buying my first home which is a money can't buy! Re: Do I really need a broker? 52Apr 10, 2009 6:06 pm That's good to hear 1Crackers1. It is said most first home buyers choose the services of mortgage brokers as they provide a better overall service than bank staff and certain brokers provide this service 7 Days a Week. Re: Do I really need a broker? 53Apr 13, 2009 5:18 pm Wow this thread has made for some interesting reading! The vast majority of brokers & bank managers are professionals and put their customers first. The view that brokers just choose the lenders that pays the highest commissions to them is complete nonsense and personally I find it very insulting. Any broker who did that wouldn't get many referrals from their customers and ultimately would earn less than those brokers that put their customers needs first. There is also a misconception that lenders that pay less commissions have cheaper loans than lenders that pay brokers higher commissions. Some of the lenders that pay the highest commissions also have some of the best home loan deals, and they can give this win-win deal because they are more efficient and their business is well structured to handle broker introduced loans. In the last month we've recommended Westpac more often than any other banks and they have one of the worst commissions structures of all of the lenders on our panel. We recommended them because that is the lender that best suited those customers, mainly because Westpac has some unique credit policies. Re: Do I really need a broker? 55Apr 18, 2009 11:03 pm We're with Mortgage Choice....now, unfortunately you don't get to pick who they give you, and I think we got a young gun who wasn't totally versed in the FHOG - he gave us both the absolute scares (and many days of anger and frustration) when he kept telling us we had to lay a slab down before June 30 to get the full grant. Sure, if we were owner builders - but our conveyancer put him in the right frame of mind, and we've now discovered we might have a bit of play to include cooling, etc as compared to the first round of values given. It's gone back to CBA, but we've been given the initial letter saying they're happy to offer us, pending all the usual BS. Question, if we're not happy with the staff member assigned to us, but want to stay with the local office/franchise, can we say so to the manager and get someone else ? I've been more than happy to let someone else do the dirty work, just as long as he knows what he's doing (most of the time). Re: Do I really need a broker? 56Apr 19, 2009 12:35 am pauljulian We're with Mortgage Choice....now, unfortunately you don't get to pick who they give you, and I think we got a young gun who wasn't totally versed in the FHOG - he gave us both the absolute scares (and many days of anger and frustration) when he kept telling us we had to lay a slab down before June 30 to get the full grant. Question, if we're not happy with the staff member assigned to us, but want to stay with the local office/franchise, can we say so to the manager and get someone else ? I've been more than happy to let someone else do the dirty work, just as long as he knows what he's doing (most of the time). It's so common isn't it? You choose them because they've been around for ages and well known too. But they can't even guarantee the quality or the knowledge of their representative. One of my friends used them and the broker actually refused to help them with the grant. Their broker told them that they need to do it through his solicitor which is a load of BS. Luckily he called the bank direct and they helped him out. I saw a TV commercial for a national mortgage broker franchise where they feature ex truck drivers and ex carpet cleaners saying how they are now brokers thanks to the company. I think if not happy with the staff member assigned the franchise group will not give you someone else because as they are all self employed and it would be like depriving them of the commission. Re: Do I really need a broker? 57Apr 19, 2009 11:34 am jhome One of my friends used them and the broker actually refused to help them with the grant. Their broker told them that they need to do it through his solicitor which is a load of BS. Luckily he called the bank direct and they helped him out. Our broker tried to push a conveyencer on us, but we'd already had one teed up (family have used them), he tried twice in a conversation, I told him we had one already. I think it's a lot to do with the value-added for themselves. Re: Do I really need a broker? 58Jun 16, 2009 10:47 am I started this thread a few months ago and now since I have chosen a broker and the construction of my house started, I thought I might report my experience. Overall, if it started all over again, I would not use a broker. I was pushed to use commonwealth bank loan, although I made it very clear at the start of the conversation with the broker that I did not want to use it. (all my friends who used a broker were recommended with commonwealth bank loan, why?!) He did not recommend any other loan products although I told him about my situation....So I had to do the researching work myself. Then when I decided which bank loan to choose, my files were dealt with by an administrative assitant. She was not helpful at all. All she did was sending me the application forms. There were many sections in the form that I did not know how to fill in. But I could not get her (emails and calls never replied). So I had to go to the bank and ask for help (The staff at the branch were really nice and helpful). Then again when the first payment for the builder was due, I found that my loan application was not finalised. Because I used the broker, I could not do anything about it myself, as the mortgage centre of the bank prefered to deal with the broker. So I called the broker. She even did not know that my loan was not finalised......... Well, it seems that I wrote an essay about it. Sorry if my comments about the broker annoys someone. I guess it really depends on which kind of brokers people meet. But it is really hard to meet one who really cares about the clients. Re: Do I really need a broker? 59Jun 16, 2009 12:45 pm I think that brokers are like builders and tradies, some are fantastic and others let the rest of their industry down. The sales broker I spoke to for mine was great however the office staff were below par and at one point when I rang up to enquire where things were at her reply was 'well I have to call the bank about another customer, so I suppose I can ask about yours too' Instead of saying, 'yes, I can call the bank to find out for you' So very frustrating. 'A bottle of wine contains more philosophy than all the books in the world.' Louis Pasteur Vegie garden: viewtopic.php?f=19&t=27637&start=0 My Backyard Adventure Re: Do I really need a broker? 60Jun 16, 2009 3:28 pm Mango lover and lisanne, what you describe is a very common issue in 2009. I think a lot of brokers lose patience after staying on the bank broker hotlines for 3-4 hours a day (typically 45-60 minutes on hold and 15 minutes of discussion per customer per call). The problem emanates from the lack of full and transparent information about a customer's file on the lenders' online systems (for brokers). If the information is not provided to the broker then it means everytime there is a new question, a phone call has to be made (some lenders do not accept questions by email) and spend lots of time. On the issue of Cba for construction loans, it's often the case a new customer will say to me "My friend says CBA is the best for construction and I should apply for that" and when I provide a range of lenders for choice I am often surprised to hear "why are you interested in offering other lenders? Do they pay better commission?". do not pay until you are satisfied with workmanship windows require flashing over the head archithrave and up under weatherboards 3 28281 Broker here - legislation says that every true broker must put the clients best interests before theirs so in theory they must offer you the best options for you on their… 2 46013 Thank you so much for the effort. We will use it to talk with builder. We also had idea of building duplex instead and seeking suggest ions. viewtopic.php?f=31&t=106744 11 13833 |